Wild swings

These markets are just plain crazy. Having never lived through a depression before, I can only read history and make assumptions.

Looking at history, '29-'32 saw a 90% top to bottom. However, there were many large rallies along the way. Each intervention from the government lead to hopes of the bottom in only to be dashed again. Once the bottom was truly in so many had lost faith in equities that it took 20 years to gain back the glory.

This is why we are not at a bottom yet. We still have pundits predicting the bottom is in. That probably wont happen until no one claims the bottom. Until then these are very wild times. Swings from euphoria to depressed are happening on a daily basis.

Even the fed chairman and his books on the depression fails to see what is before him (at least he wont admit it publicly). What sets this financial tsunami from the 30's is the massive debt load. In the '30's we were a creditor nation and borrowed our way out of the mess. Today we are so far in debt that we are pushing on a string.

When JP Morgan goes on the ropes, it will be much larger than any of the other bailouts we have witnessed. That should take the markets down much more. As noted before, I expect around a 5,000 DOW maybe even more.

If you do not have the skills to trade these wild swings, then go to cash and wait the great buying opportunities that are coming up in businesses that fail, Real Estate on the cheap and stocks that will be at generational lows. (Those that survive)

For now, I am long puts on just about anything and selling the closer month. When we get a rally, I buy back the short side wait for the next large drop and then sell it again over and over.

Later